Stepping up the pressure on Cisco Systems Inc in the VOIP equipment market, China's Huawei Technologies Co. Ltd. has announced a partnership with Microsoft Corp a move analysts say is bound to raise the hairs on Cisco's neck.

Cisco and Huawei have been at loggerheads since the incumbent provider slapped a lawsuit on Huawei, accusing the company of violating copyright laws and stealing intellectual property to use in its products and support materials.

Cisco recently halted the suit pending an independent review of Huawei products, after Huawei said it had changed its source code.

Now Huawei is back on the offensive, teaming up with Microsoft in China, where the two firms will sell an integrated package of next-generation network equipment from Huawei coupled with Microsoft's Exchange Server 2003. Dubbed U-SYS WorkSpace, the offering is aimed at carriers looking to offer IP Centrex and other hosted IP services like Microsoft Exchange.